tv [untitled] November 7, 2013 7:00am-7:31am PST
welcome back everyone to the budget and financial committee meeting for wednesday the 6th. again, i appreciate everyone who is come being in attendance. thank you supervisor mar and mr. bonco. i'm sorry we had to interrupt your presentation and thank you for being here and if you want to continue. >> sure. i'll go over the punch line again. i said what the city of san francisco can do. as a large purchaser, it
could require that its contracted plans maintain robust price transparency tools for their patient members and can that they work toward eliminating the gag claws of providers so there's not holes to consumers about what different providers might cost in terms of their out of pocket liability. what i was about to say is the city of san francisco, in order to make sure it meets its fiduciary duties could have all contract plans could offer discloses. any third party vendor contracted by the city and county so analyze on make information available to consumers. the city could consider building its own data base to design to produce robust information by its citizens. the only thought i
have to add that people live or work in san francisco may seek care outside the city's boundaries or may live elsewhere and come into the city to work, the city could play a role in providing state wide of this kind. the city could work to insure that health care providers have information to health care information. research shows which is promising that if physician has access to that information they'll work in the best interest of their patient. one study showed when they had accessed the information of case such as diagnostic test, that they were ordering for patients. she ordered fewer of them. physicians are the gate keeper of our health care spending and this is promising for the impact on quality as well as on cost. and i think that greater quality and price transparency for providers them self could have an impact on physician referral pattern and how they deliver care. as we
look at new methods of payment, physicians will have greater and greater incentives to make smarter choices but transparency has to be a building block. as executive representing many health care providers across the country, they and consumers buy transparency and i commend the city working together to advance the efforts. >> can i ask you a few followup questions. you talk about price information. as you think about the data set that would be ideal, what does that include asided from prices? is there an agreement across the fields that there's line up, what do you think about that? >> that's a great question. we have more to learn about how consumers understand information and use it, so i'll say that we need to continue to
research that and experiment. but at the end of the day, i think it's essential that compare price information with quality information. we have research showing us that people assume more expensive care is better care, but the data don't bare that out. there's no correlation between prices and the quality of care and so if we provide any information, it must be paired with quality. >> okay. and were you familiar with or did you work with senator lino on his transparency? >> no. >> we'll talk to other speakers. supervise mar has a question. >> i'm sorry i want here. supervisor avalos were at the air quality management district as we passed a climate action plan with a 10 point program to clean the an air and address future sustainable needs. has there been an analysis of coast
overtime from health care providers like a chinese hospital or saint like before the setter decision and how they access health care like ucf or cpnc, but is there an analysis over time and access to low income communities. >> i don't know the research for san francisco, but i know the research as professor malic has. it almost results in higher prices and ken has access issues as there is one obvious way to think about it is what does it mean for the prices being charged to the uninsured. it's rare that
people who can't afford it pay the full price, but it could happen, but there's also concern that as prices continue to rise, that the growing gap between what commercial payers pay and what public payers pay, could lead to access issues generally that there may not be providers accept general patients because their prices haven't been kept low enough since they didn't have to be kept low enough and it's no longer sustainable to them to provide to those who can't pay. there is a broad body of research to be done, but there's more to learn. >> i know some were saying as we were negotiations and supervisor farrel and chiu did great work to make sure the cpnc development is going to move forward at a positive way, but i know as the 50 bed
centralized location was being discussed. some were saying st. mary and others might be negatively impacted by prices going up as a large centralized hospital which was created and i'm wondering how is that operated in terms of equity in other counties, and pricing within the health care company. >> i don't know the data well specifically for san francisco county or other surrounding counties but when there are must have providers, either because they're larger or because of their reputation, they charge higher prices that will impact the market across the board and lead to other lower price companies negotiate for higher prices or it's possible though in the current era and what i'm seeing with large employers that there's an
increasing lead to cart those providers out if they're too unaffordable. the state of massachusetts is good to look at. the agency who buys for state employees are less expensive because they use an alternative network which means the lower networks in the market. as network design changes occur, i think we can see things really change a lot as more competition gets introduced that way. >> last question and i should have asked this of professor midic, we think about a state exchange here in california, what do you think the impact is going to be in terms of our topic about costs and i think as we went through the cpmc
discussions, the only thing we agree on is everyone doesn't know what's going to happen. what do you think about it? >> in california you have a proactive value purchaser of health care. it can have a significant impact on in this market in terms of what it's going to demand of the participating health plan and the prices they have and the information they provide to their enrolled patients around helping and supporting them to make more economical decisions. the only way they're going to be successful is if they do that. there's going to be pressure on innovative network design and we've seen what they've come forward with for limited networks. >> could you see them as being the catalyst to cover california? >> i think in this particular state they can certainly be a strong catalyst for change. >> okay. thank you very much.
next, we have profession or fessor king. i'm glad you're feeling well and professor king is here after giving birth to her child. so i want to thank you for being here and so professor king, i was able to meet with her team last week in my office and perhaps you want to talk about the joint hastings at ucfs that you're apart of. >> thank you for having me to be here today, as supervisor farrel said, i'm jaime farrel. i'm an associate pate director of the ucfs on law, science and health policy. we do a range of things related to health and
education and research and one of the research products we've been working on for the last year and a half relates to transparency health cost and competition. everyone in this room knows health care price transparency received a lot of attention in california and nationally and wide variation on a state to state level and city to city. we at uc hastings have been looking at these issues over the last year and a half in conjunction of ucfs that's focused on the research aspect. we've been looking at the legal analysis and i with my colleagues have recently published a paper in the health care market that addresses these issues. as part of that work, we've been looking at the legal barriers to price transparency. today we were invited to speak about
the legal barriers and we're going to focus on two. we're going to focus on contract barriers and then trade secret protection that had been claimed with respect to health care health care prices. let's start with contractural prices. it limits the sufficient in the health care market and prevent information from being disclosed. the gag clauses that we've discussed and there's antitiers and steering previsions which was spoken of this earlier. this prevent ensurers to using information.
with the gag clauses, these are the con track you'll -- there maybe be instances where you have to take ale step further. we have some anecdote evidence of entities not writing these kinds of clauses into the contract. so that it's an agreed upon thing that the client won't be disclosed to there's no non disclose you are agreement but it's something that the ure agreement but it's something that the parties may agree upon. >> another barrier to transparency is from providers and consumers saying that the health care information is a secret. whether it's a matter
of law it's an instance for the state to decide. states can differ on whether or not they agree of this. the california and 46 other states adopted the uniform act which has some consistence. in california the basic requirements to qualify as a trade secret has two basic elements. first the secret see must provide a competitive advantage and second that the owners must make an effort to maintain that level of secret see secrecy. the first is legal precedent. legal precedent showing pricing information doesn't constitute a trade secret as a matter of law. instead trade secret
increase including those about pricing information are very fact specific. they're decided on a case by case basis and they are notorious harder to prove. while our research uncovered some specific instances from different industries where pricing information was granted, trade secrets protection, we're unaware of any instance in california where health care pricing where the law helped a trade secret. >> not only in california but anywhere else in the jurisdiction. >> that's for california. we uncovered one case in north carolina from the late 1990s where hmo pricing information was considered to be a trade secret but it was done on public policy grounds. it was when they were trying to promote hmo and give them protection and they're specific about the reason for doing so.
so 20 something years later, we can say that didn't work out well, so now public policy may put us in a different position. mar. >> i had a specific question to the budget committee and probably the health -- the health commission as well. as we were discussing kaiser rates and it's great that kaiser is here, it was some question that the care management and other issues were protected and could not be revealed because of trade secrets but i'm wondering on different data like that, would you consider that a trade secret? >> explain to me the data again. what is it? >> so as we were discussing kaiser's rates, there were different issues that i believe kaiser rep said they didn't give and we did receive information from kaiser later, and it's basically -- i think
it was called integrated care management and many people were talking about how the rates were going up and kaiser was saying that's trade secrets, i believe. >> i think what i'm mostly here to say is you can claim something is protected by as trade secret, but the only way you find out is if anyone information constitutes a trade secret is try it in court. there are -- it's something that's fact specific and so it's jurisdiction and fact specific, so depending on all the ends and outs of this and how they've used it in the past will make that determination, but it's not something that i can offer you -- a strict opinion on at this point. >> maybe the others can comment on that later. >> the other factor that makes forward matter is in
california, in some instances there's protection granted to some hospital records and board of supervisors records needing minutes or other information that contains health care pricing information and that is protected from disclosure by statute. but that stat tory is limit. it's left up to the public. they're given discretion to make that decision to protect the information, but it's not something that a provider organization can provide that whether to disclose it or not. any statutes that we have in california related from disclosures aren't broad. that information that's protected from disclosure constitutes a
trade secret. it's an -- trade secret law initially had a number of original goals and it was to promote fairness and competition and innovation. it was to prevent employees from taking one information and giving it to another company. there were laws to protect one competitor from another, not a provider from keeping information from its consumers or keeping information from its patient. and so these goals don't appear to be furthered by the way the trade secret law is being used in the health care context. and by any instance of concealing prices from providers or from consumers them self, so each of these factors suggested an issue of
whether or not health care prices was a secret and claiming that protection doesn't necessarily make it binding and doesn't make it a trade secret. >> professor , can i ask a question. i think it's very relevant. as we think about the shifting cost consumers from employer based plans where you have insurance premiums that's kept lower because they don't want to be so outrageous, but whatever i do, i'm paying more out of pocket. this isn't a trial on a specific issue, but is seems to me the more consumers are being asked to shoulder the out of pocket burden, not just through premiums but truly on a case by case specific health care treatment and by health care treatment basis, would it seem
logical to follow the transparency is more relevant in the trade secret laws to shield consumers and it's less of a legal claim. i love to get your thoughts. >> that's right. i think the more that what we see happening is valuable information that is vital to competition in the marketplace, that's vital to consumers being able to make decisions on who is a higher value. i think public policy weighs heavily in not offering protection. the massachusetts general attorney did a large study a number of years ago and a lot of information was disclosed to the massachusetts ag that claims claim secret protection. they found it was against public policy to in light of trade secrets considerations and protections that have been claimed for that information. they held it was
in the public interest to disclose the information they found anyway. so i think that you're exactly right. when we think about consumers in the market and the impact that this is having on them, the public policy is going to sway in the other direction. as we start to see more aco's develops and more bundle care and providers have a larger burden of determining -- we only have a certain amount of a patient and we have to make referrals to different providers. it's going to be important to how much it costs so they can keep their own cost down when they're thinking about making referrals. it's not going to be just patient that needs this information, but it's vital for the provider to make that decision going forward. there's a number of different ways of addressing these
barriers and it's true legislation. one of the first thing that has been tried to address the contract terms and either prohibit gag clauses or previsions in these contracts. california has done this through sp 57 recently. 751 prohibits gag clauses once an individual is in a plan. sb 57 went onto prevent gag clauses to hhs qualified entities. they prohibit any clauses that would ban it. so -- they don't require to disclosing to anyone outside the public once you've enrolled in a plan accident so you , so you may not know how much it is when youen role. it's important to know how you
want transparency in the system. do you want it at the point of treatment system and all of those are useful, but it's important to think about where that comes in. while these bills -- so you may want to go -- while these bills do help promote price transparency, you may want to go one step forward and mandate disclosure of certain kinds of information or disclose a broader range. another possible legislative move would be to simply settle the trade secret issue and say, pass legislation saying that health care price information does not constitute a trade secret in certain instances or certain kinds of health care information cannot constitute a trade secret as a matter of law. and that may be another way to go about resolving some of these issues. president mar. >> as we were discussing the
kaiser services going on. we brought it to the board level for further discussion and this was some revelation of that data, but kaiser systems wasn't divulgeable because of a gag on ready or a trade system that was being disclosed. it could go from the patients to the health board to the board of supervisors, where do you think is the protected information where people could understand it and it doesn't seem to be protected as a trade secret? >> i think there's different levels of where you can offer that disclosure. certainly in the kaiser instance, at the level at the board of supervisors and hsf in making decisions about what kind of
carrier purchasing accident i think transparency is great to help you decide how much you're going to pay. there's ordinances that i have to make sure to insure that the board of supervisors can see that. it's important to realize that there's different claims. something protected by a contract clause that's separate from the trade secret argument. if you're bound by a non disclosure agreement, the trade secret argument, you're subject to braech of contract if you break that. that's a supplement of that. if you remove the gag clause, you still have the trade secret argument, so you have to deal with them. i think you want to inject some transparent -- the most amount of transparency at the level of the board of
supervisors and hsf and establish what you think is absolutely necessary for patients to find out as well. >> i think that's a great example of how we did bring it to the budget and the board of supervisors and i think what has occurred is bet he transparency and i thank you kaiser for negotiating it, but we had to bring it to the board level to have that discussion to encourage transparency from kaiser and the other institutions as well. thank you for the great example. >> beyond my legislation you have the option of regulation. regulation can be done by the department of manage care or done by the department of insurance and things you might think about is requiring full disclosure of prices in order to be eligible to offer a plan in san francisco or offer a plan in the exchange. you
might tie them to rate increase or tie it to a rate increase at a certain level. those might be options to promote disclosure and get that information out there. that's another option. the third option with respected trade secrets is to test them in litigation. so there's a couple of ways to do this. you can disclose information that someone had claimed trade secret over and wait to see if they file a claim against you, but more lawful way of doing that is to make a request to get that information to a california public records request and if the request was denied then test the clause and appeal. there's other ways to do that. so we've addressed with the legal barriers are to to gaining price trans transparency and some of the possible solutions to that, in a final note, i want to reiterate that was said by the people before me which is that
above market prices arise not from just a lack of price transparency, but from the market leverage that drives cost up and keeps these prices secret. that's where this is coming from is the exercising of the prices. if you don't fix it, you may not get the results you're hoping for which is lower cost. a viable solution needs to do two things, it needs to break down the existing market leverage and there's different ways that that could be done. that needs to be tried and then secondly you need to implement price transparency that disclose both price and disclosure information and i think mrs.
aboca addressed that as well. with those two, i thank you for your time. >> thank you professor. you can applaud. >> one of the things that we talk about continues by the city of san francisco and how we sit here today and a lot is -- there's federal things and there's state -- a lot at the state level. just talk about what you think we can do here in the city of san francisco. we talked about premption and where we can poke and where we can't as a city. >> i will briefly address it. i'm not an expert. i really have to be careful on anything i say. i think to the extent that you can claim home rule immunity on the things you're trying in san francisco and suggest